What Is a DSCR Loan?

DSCR = Gross Monthly Rent ÷ Monthly Loan Payment

A DSCR Loan (short for Debt-Service Coverage Ratio Loan) also known as a Buy & Hold Loan is a type of real estate financing used by investors to purchase or refinance rental properties based on the property’s cash flow, not the borrower’s personal income. This loan is approved based on whether the rental income can cover the debt not your job, W-2s, or tax returns.

Common Use Cases

  • Purchasing or refinancing a long-term rental

  • Refinancing a fix & flip into a rental

  • Get funding for purchase + rehab

  • Building a passive income portfolio

DSCR Loan Benefits

  • No tax returns or employment checks

  • Great for self-employed or investors with many properties

  • Can finance multiple properties at once

  • Helps turn flips into rentals without delay

Example of DSCR

  • Monthly Rent: $2,000

  • Monthly Payment (PITI): $1,600

  • DSCR = 2000 ÷ 1600 = 1.25

In this case, the deal would qualify with a DSCR of 1.25.

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type of loans

FIX & FLIP LOAN

Rental property funding based on cash flow, not personal income.

DSCR LOAN

Rental property funding based on cash flow, not personal income.

NEW CONSTRUCTION LOAN

Break ground with confidence.

COMMERCIAL LOAN

For a larger deals and portfolio expansion

LAND LOAN

A land loan finances undeveloped land for future use.

CASH-OUT REFINANCE

Access home equity and get cash in hand

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